Rio Tinto’s Tiwai aluminium smelter closure not final in 2024

According to the documents revealed under the Official Information Act, New Zealand, Rio Tinto and ministers’ discussion varied the global metal giant’s proposal to shut down the Tiwai Point aluminium smelter in 2024.

In January 2021, Rio Tinto majority-owned aluminium smelter declared that it would functionalize NZAS until the end of 2024, following thumping down Meridian Energy on the price it pays for power supply.

However, the documents disclosed under the OIA delivers a clear image that the date for shutting down New Zealand’s only aluminium smelter that accommodates around 800 staff and contractors is not yet ‘final’.

On 6th May, Ivan Vella, Global of Aluminium for Rio Tinto met the Finance Minister of New Zealand Grant Robertson, Energy Minister Megan Woods and Environment Minister David Parker in Wellington.

A note drafted by Environment Ministry officials stated there was a discussion at the meeting “about changing the planned closure date from 2024”.

“Rio Tinto acknowledged a decision on final closure dates should come soon but were not specific regarding the time frames,” the officials’ note said.

Although, the ministers asked the mining company to return with more additional information.

A few days later, Jacinda Ardern, Prime Minister of New Zealand met Jakob Stausholm, CEO of Rio Tinto, who subsequently wrote an apologetic letter to Ardern, reassuring to recondition a “collaborative and positive” working relationship with the Government.

The price of the metal aluminium has approx. doubled since April 2020 to trade at a near-record high of NZ$ 4247 a tonne, propelling speculation that Rio Tinto will entreat a new power deal to keep the aluminium smelter operational beyond 2024.

But the Anglo-Australian multinational company has not vitalized that speculation by publicly acknowledging that has been a trending topic for discussion.

However, on the note, a spokesman for the smelter said: “Power-supply contract ends in December 2024. We have to plan and be ready to close at that time.”

The New Zealand Government emerges to have a strong environmental interest in securing that if an agreement is attained to keep the smelter functional beyond 2024, that is confirmed as soon as practical and does not again go down to the wire.

Marc England, Genesis Energy CEO said in May: “Generators appeared to be investing on the assumption the smelter would stay open longer.”

The note drafted for Ardern suggested ministers were observant of happening doubts over Rio Tinto’s aspiration.

“Ministers asked that any decisions improve certainty for the market if at all possible,” it said.

The surge in aluminium prices and the certitude the smelter does not have the privilege to electricity beyond 2024 could stir power suppliers Meridian into a stronger negotiating position than the previous phase.